UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 10-Q
(Mark One)
| [X] |
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 |
| |
|
|
For the quarterly
period ended: March 31, 2010
OR
| [ ] |
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition
period from ________________ to ________________
Commission File
Number: 0-11412
| AMTECH SYSTEMS, INC. |
| (Exact name of registrant as specified
in its charter) |
| Arizona |
86-0411215 |
| (State or other jurisdiction
of |
(I.R.S. Employer |
| incorporation or organization) |
Identification No.) |
| |
| 131 South Clark Drive,
Tempe, Arizona |
85281 |
| (Address of principal executive
offices) |
(Zip
Code) |
Registrant’s
telephone number, including area code: 480-967-5146
Indicate by a check
mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements for the past
90 days. [X] Yes [ ] No
Indicate by check
mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post
such files). [ ] Yes [ ] No.
Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer,
a non-accelerated filer, or a smaller reporting company. See the definitions of
“large accelerated filer,” “accelerated filer” and “smaller reporting company”
in Rule 12b-2 of the Exchange Act. (Check one):
| Large accelerated filer [ ] |
Accelerated filer [
] |
| Non-accelerated filer [ ] (Do not check if a smaller
reporting company) |
Smaller Reporting Company
[X] |
Indicate by check
mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes [ ] No [X]
Shares of Common Stock
outstanding as of April 29, 2010: 9,020,727
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
2
ITEM
1. Condensed Consolidated Financial Statements
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(in thousands except share data)
|
|
|
March 31, |
|
September
30, |
|
|
|
2010 |
|
2009 |
| Assets |
|
(Unaudited) |
|
|
|
| Current Assets |
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
43,145 |
|
$ |
42,298 |
|
Restricted cash |
|
|
5,126 |
|
|
1,496 |
|
Accounts receivable |
|
|
|
|
|
|
|
Trade (less allowance for doubtful accounts of $348 and $465 at |
|
|
|
|
|
|
|
March 31, 2010 and September 30, 2009, respectively) |
|
|
8,748 |
|
|
8,409 |
|
Unbilled and other |
|
|
6,213 |
|
|
5,156 |
|
Inventories |
|
|
20,569 |
|
|
13,455 |
|
Deferred income taxes |
|
|
2,650 |
|
|
2,290 |
|
Income taxes receivable |
|
|
120 |
|
|
- |
|
Note receivable |
|
|
1,009 |
|
|
- |
|
Prepaid expenses and other |
|
|
2,661 |
|
|
841 |
|
Total current assets |
|
|
90,241 |
|
|
73,945 |
| |
| Property, Plant and Equipment -
Net |
|
|
9,251 |
|
|
8,477 |
| Deferred Income Taxes - Long
Term |
|
|
740 |
|
|
1,140 |
| Intangible Assets -
Net |
|
|
3,359 |
|
|
3,828 |
| Goodwill |
|
|
4,792 |
|
|
5,136 |
| Other Assets |
|
|
25 |
|
|
- |
| Total Assets |
|
$ |
108,408 |
|
$ |
92,526 |
| |
|
|
|
|
|
|
The accompanying notes are an integral part of
these condensed consolidated financial statements.
3
AMTECH SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands except share data)
|
|
|
March 31, |
|
September 30, |
|
|
|
2010 |
|
2009 |
| Liabilities and
Stockholders' Equity |
|
(Unaudited) |
|
|
|
| Current Liabilities |
|
|
|
|
|
|
|
| Accounts payable |
|
$ |
11,261 |
|
|
$ |
4,181 |
| Current maturities of long-term
debt |
|
|
121 |
|
|
|
121 |
| Accrued compensation and related
taxes |
|
|
3,293 |
|
|
|
2,877 |
| Accrued warranty expense |
|
|
1,334 |
|
|
|
1,429 |
| Deferred profit |
|
|
3,891 |
|
|
|
4,727 |
| Customer deposits |
|
|
14,486 |
|
|
|
2,861 |
| Other accrued liabilities |
|
|
1,434 |
|
|
|
1,721 |
| Income taxes payable |
|
|
- |
|
|
|
160 |
|
Total current
liabilities |
|
|
35,820 |
|
|
|
18,077 |
| |
| Income Taxes Payable
Long-term |
|
|
490 |
|
|
|
480 |
| Other Long-Term
Obligations |
|
|
96 |
|
|
|
164 |
|
Total liabilities |
|
|
36,406 |
|
|
|
18,721 |
| |
| Commitments and
Contingencies |
|
|
|
|
|
|
|
| |
| Stockholders' Equity |
|
|
|
|
|
|
|
| Preferred stock; 100,000,000 shares authorized;
none issued |
|
|
- |
|
|
|
- |
| Common stock; $0.01 par value; 100,000,000
shares authorized; |
|
|
|
|
|
|
|
|
shares issued and outstanding: 9,020,727
and 8,961,494 |
|
|
|
|
|
|
|
|
at March 31, 2010 and September 30, 2009,
respectively |
|
|
90 |
|
|
|
90 |
| Additional paid-in capital |
|
|
71,136 |
|
|
|
70,403 |
| Accumulated other comprehensive income
(loss) |
|
|
(2,160 |
) |
|
|
661 |
| Retained Earnings |
|
|
2,936 |
|
|
|
2,651 |
|
Total stockholders'
equity |
|
|
72,002 |
|
|
|
73,805 |
| Total Liabilities and Stockholders'
Equity |
|
$ |
108,408 |
|
|
$ |
92,526 |
| |
|
|
|
|
|
|
|
The accompanying
notes are an integral part of these condensed consolidated financial
statements.
4
|
|
Three Months Ended March
31, |
|
Six Months Ended March
31, |
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
| Revenues, net of returns and
allowances |
$ |
16,077 |
|
|
$ |
10,904 |
|
|
$ |
31,534 |
|
|
$ |
28,776 |
|
| Cost of sales |
|
11,369 |
|
|
|
8,547 |
|
|
|
22,226 |
|
|
|
20,333 |
|
|
Gross profit |
|
4,708 |
|
|
|
2,357 |
|
|
|
9,308 |
|
|
|
8,443 |
|
| Selling, general and administrative |
|
4,061 |
|
|
|
3,101 |
|
|
|
8,037 |
|
|
|
7,585 |
|
| Impairment and restructuring
charges |
|
- |
|
|
|
1,682 |
|
|
|
- |
|
|
|
1,682 |
|
| Research and development, net of grants earned |
|
225 |
|
|
|
152 |
|
|
|
722 |
|
|
|
376 |
|
|
Operating income (loss) |
|
422 |
|
|
|
(2,578 |
) |
|
|
549 |
|
|
|
(1,200 |
) |
| Interest and other income (expense), net |
|
(76 |
) |
|
|
(14 |
) |
|
|
(74 |
) |
|
|
47 |
|
| Income (loss) before income
taxes |
|
346 |
|
|
|
(2,592 |
) |
|
|
475 |
|
|
|
(1,153 |
) |
| Income tax expense (benefit) |
|
140 |
|
|
|
(580 |
) |
|
|
190 |
|
|
|
- |
|
|
Net income
(loss) |
$ |
206 |
|
|
$ |
(2,012 |
) |
|
$ |
285 |
|
|
$ |
(1,153 |
) |
| |
| Earnings (Loss) Per
Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Basic earnings (loss) per share |
$ |
0.02 |
|
|
$ |
(0.22 |
) |
|
$ |
0.03 |
|
|
$ |
(0.13 |
) |
| Weighted average shares
outstanding |
|
9,018 |
|
|
|
9,057 |
|
|
|
8,995 |
|
|
|
9,078 |
|
| |
| Diluted earnings (loss) per
share |
$ |
0.02 |
|
|
$ |
(0.22 |
) |
|
$ |
0.03 |
|
|
$ |
(0.13 |
) |
| Weighted average shares outstanding |
|
9,239 |
|
|
|
9,057 |
|
|
|
9,156 |
|
|
|
9,078 |
|
The accompanying notes
are an integral part of these condensed consolidated financial
statements.
5
|
|
Six Months Ended March
31, |
| |
2010 |
|
2009 |
| Operating
Activities |
|
|
|
|
|
|
|
| Net income
(loss) |
$ |
285 |
|
|
$ |
(1,153 |
) |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
845 |
|
|
|
747 |
|
|
Write-down of inventory |
|
258 |
|
|
|
257 |
|
|
Deferred income taxes |
|
(9 |
) |
|
|
(711 |
) |
|
Impairment of long-lived assets |
|
- |
|
|
|
1,054 |
|
|
Non-cash share based compensation expense |
|
570 |
|
|
|
333 |
|
|
Provision for (reversal of) allowance for doubtful
accounts |
|
(20 |
) |
|
|
103 |
|
| Changes in operating assets
and liabilities: |
|
|
|
|
|
|
|
|
Restricted cash |
|
(3,949 |
) |
|
|
1,756 |
|
|
Accounts receivable |
|
(2,430 |
) |
|
|
6,082 |
|
|
Inventories |
|
(8,708 |
) |
|
|
(448 |
) |
|
Accrued income taxes |
|
(441 |
) |
|
|
420 |
|
|
Prepaid expenses and other assets |
|
(1,991 |
) |
|
|
(277 |
) |
|
Accounts payable |
|
7,723 |
|
|
|
(3,429 |
) |
|
Accrued liabilities and customer deposits |
|
12,923 |
|
|
|
(3,556 |
) |
|
Deferred profit |
|
(501 |
) |
|
|
349 |
|
| Net
cash provided by operating activities |
|
4,555 |
|
|
|
1,527 |
|
| Investing
Activities |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
(2,059 |
) |
|
|
(838 |
) |
| Decrease in restricted cash
long-term |
|
- |
|
|
|
164 |
|
|
Payment for licensing agreement |
|
- |
|
|
|
(600 |
) |
| Investment in note
receivable |
|
(1,000 |
) |
|
|
- |
|
|
Investment in R2D |
|
- |
|
|
|
(164 |
) |
| Net cash used in investing
activities |
|
(3,059 |
) |
|
|
(1,438 |
) |
| Financing
Activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock |
|
155 |
|
|
|
- |
|
|
Purchase of common stock under repurchase program |
|
- |
|
|
|
(448 |
) |
| Payments on long-term
obligations |
|
(59 |
) |
|
|
(89 |
) |
|
Excess tax benefit of stock options |
|
9 |
|
|
|
- |
|
| Net cash provided by (used in)
financing activities |
|
105 |
|
|
|
(537 |
) |
| Effect of Exchange Rate Changes
on Cash |
|
(754 |
) |
|
|
120 |
|
| Net Increase
(Decrease) in Cash and Cash Equivalents |
|
847 |
|
|
|
(328 |
) |
| Cash and Cash Equivalents,
Beginning of Period |
|
42,298 |
|
|
|
37,501 |
|
| Cash and Cash
Equivalents, End of Period |
$ |
43,145 |
|
|
$ |
37,173 |
|
| Supplemental Cash Flow
Information: |
|
|
|
|
|
|
|
| Interest paid |
$ |
29 |
|
|
$ |
14 |
|
|
Income tax refunds |
$ |
21 |
|
|
$ |
379 |
|
| Income tax
payments |
$ |
637 |
|
|
$ |
530 |
|
| Supplemental Non-cash Financing
Activities: |
|
|
|
|
|
|
|
| Transfer inventory to capital
equipment |
$ |
- |
|
|
$ |
116 |
|
|
Intangible assets funded with current liabilities |
$ |
- |
|
|
$ |
200 |
|
The accompanying
notes are an integral part of these condensed consolidated financial
statements.
6
1. Basis of Presentation
Nature of Operations and Basis of
Presentation – Amtech
Systems, Inc. (the “Company”) designs, assembles, sells and installs capital
equipment and related consumables used in the manufacture of solar cells,
semiconductors and wafers of various materials, primarily for the solar and
semiconductor industries. The Company sells these products worldwide, primarily
in Asia, the United States and Europe. In addition, the Company provides
semiconductor manufacturing support services.
The Company serves
niche markets in industries that are experiencing rapid technological advances,
and which historically have been very cyclical. Therefore, future profitability
and growth depend on the Company’s ability to develop or acquire and market
profitable new products, and on its ability to adapt to cyclical trends.
The accompanying
unaudited condensed consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
(the “SEC”), and consequently do not include all disclosures normally required
by U.S. generally accepted accounting principles. In the opinion of management,
the accompanying unaudited interim condensed consolidated financial statements
contain all adjustments necessary, all of which are of a normal recurring in
nature, to present fairly our financial position, results of operations and cash
flows. Certain information and note disclosures normally included in financial
statements have been condensed or omitted pursuant to the rules and regulations
of the SEC. These condensed consolidated financial statements should be read in
conjunction with the audited consolidated financial statements and notes thereto
included in our Annual Report on Form 10-K for the fiscal year ended September
30, 2009.
The consolidated
results of operations for the three and six month periods ended March 31, 2010,
are not necessarily indicative of the results to be expected for the full year.
Use of Estimates – The preparation of financial statements in
conformity with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Revenue Recognition – Revenue
is recognized upon shipment of the Company’s proven technology equal to the
sales price less the greater of (i) the fair value of undelivered services and
(ii) the contingent portion of the sales price, which is generally 10-20% of the
total contract price. The entire cost of the equipment relating to proven
technology is recorded upon shipment. The remaining contractual revenue,
deferred costs and installation costs are recorded upon successful installation
of the product.
For purposes of
revenue recognition, proven technology means the Company has a history of at
least two successful installations. New technology systems are those systems
with respect to which the Company cannot demonstrate that it can meet the
provisions of customer acceptance at the time of shipment. The full amount of revenue and costs of new technology shipments is
recognized upon the completion of installation at the customers’ premises and
acceptance of the product by the customer.
Revenue from services
is recognized as the services are performed. Revenue from prepaid service
contracts is recognized ratably over the life of the contract. Revenue from
spare parts is recorded upon shipment.
7
Deferred Profit – Revenue deferred pursuant to the Company’s
revenue recognition policy, net of the related deferred costs, if any, is
recorded as deferred profit in current liabilities. The components of deferred
profit are as follows:
|
|
March 31, |
|
September 30, |
|
|
2010 |
|
2009 |
|
|
(dollars in
thousands) |
| Deferred revenues |
$ |
4,614 |
|
$ |
6,904 |
| Deferred costs |
|
723 |
|
|
2,177 |
| Deferred profit |
$ |
3,891 |
|
$ |
4,727 |
| |
|
|
|
|
|
Concentrations of Credit Risk – Financial instruments that potentially subject
the Company to significant concentrations of credit risk consist principally of
trade accounts receivable. The Company’s customers, located throughout the
world, consist of manufacturers of solar cells, semiconductors, semiconductor
wafers, and MEMS. Credit risk is managed by performing ongoing credit
evaluations of the customers’ financial condition, by requiring significant
deposits where appropriate, and by actively monitoring collections. Letters of
credit are required of certain customers depending on the size of the order,
type of customer or its creditworthiness, and its country of domicile. Reserves
for potentially uncollectible receivables are maintained based on an assessment
of collectability.
As of March 31, 2010,
one customer accounted for 20% of accounts receivable.
Restricted Cash –
Restricted cash of $5.1 million
and $1.5 million as of March 31, 2010 and September 30, 2009, consists of bank
guarantees required by certain customers from whom deposits have been received
in advance of shipment and $0.5 million of cash in an escrow account related to
contingent payments to be paid to the sellers of R2D due to the fulfillment of
certain requirements.
Accounts Receivable - Unbilled and
Other – Unbilled and other accounts receivable
consist mainly of the contingent portion of the sales price that is not
collectible until successful installation of the product. These amounts are
generally billed upon final customer acceptance. The majority of these amounts
are offset by balances included in deferred profit. As of March 31, 2010, the
unbilled and other includes $1.8 million of Value Added Tax (VAT) receivables at
our Netherlands operations. These are taxes that we have paid to our vendors
that will be refunded to the Company by the government.
Inventories – Inventories are stated at the lower of cost
or net realizable value. Costs for approximately 90% of inventory are determined
on an average cost basis with the remainder determined on a first-in, first-out
(FIFO) basis. The components of inventories are as follows:
|
|
March 31, |
|
September 30, |
|
|
2010 |
|
2009 |
|
|
(dollars in
thousands) |
| Purchased parts and raw
materials |
$ |
9,278 |
|
$ |
7,550 |
| Work-in-process |
|
8,669 |
|
|
3,277 |
| Finished goods |
|
2,622 |
|
|
2,628 |
|
|
$ |
20,569 |
|
$ |
13,455 |
| |
|
|
|
|
|
Note Receivable – Note Receivable consists of a short-term
note receivable from one of the Company’s technology partners. The note is
collateralized by the intellectual property of the technology partner and is
personally guaranteed by the CEO of the technology partner. As additional
security, the CEO of our technology partner has pledged a portion of his
ownership interest in the company. Interest accrues at 4.5% annually. The first
interest payment was due and received by the Company in April 2010. The loan
matures on June 30, 2010.
8
Property, Plant and
Equipment – Property,
plant and equipment are recorded at cost. Maintenance and repairs are charged to
expense as incurred. The cost of property retired or sold and the related
accumulated depreciation are removed from the applicable accounts when
disposition occurs and any gain or loss is recognized. Depreciation is computed
using the straight-line method. Useful lives for equipment, machinery and
leasehold improvements range from three to seven years; for furniture and
fixtures from five to 10 years; and for buildings 20 years.
The following is a
summary of property, plant and equipment:
|
|
March 31, |
|
September 30, |
|
|
2010 |
|
2009 |
|
|
(dollars in
thousands) |
| Land, building and leasehold
improvements |
$ |
7,643 |
|
|
$ |
7,124 |
|
| Equipment and machinery |
|
4,740 |
|
|
|
4,295 |
|
| Furniture and fixtures |
|
3,513 |
|
|
|
3,404 |
|
|
|
|
15,896 |
|
|
|
14,823 |
|
| Accumulated depreciation and
amortization |
|
(6,645 |
) |
|
|
(6,346 |
) |
|
|
$ |
9,251 |
|
|
$ |
8,477 |
|
| |
|
|
|
|
|
|
|
Goodwill – Goodwill is not subject to amortization, but
is tested for impairment at least annually. Goodwill is reviewed for impairment
on an annual basis, typically at the end of the fiscal year, or more frequently
if circumstances dictate.
Intangibles – Intangible assets are capitalized and
amortized over two to 10 years.
Long-lived assets are
reviewed for impairment when events or changes in circumstances indicate that
the carrying amount of an asset may not be recoverable.
The following is a
summary of intangibles:
|
|
|
|
|
March 31, |
|
September 30, |
|
|
|
Useful Life |
|
2010 |
|
2009 |
|
|
|
|
|
(dollars in
thousands) |
| Non-compete agreements |
|
8 years |
|
$ |
164 |
|
|
$ |
178 |
|
| Customer lists |
|
10 years |
|
|
866 |
|
|
|
940 |
|
| Technology |
|
10 years |
|
|
1,718 |
|
|
|
1,863 |
|
| Licenses |
|
10 years |
|
|
1,500 |
|
|
|
1,500 |
|
| Other |
|
2-10 years |
|
|
89 |
|
|
|
96 |
|
|
|
|
|
|
|
4,337 |
|
|
|
4,577 |
|
| Accumulated amortization |
|
|
|
|
(978 |
) |
|
|
(749 |
) |
|
|
|
|
|
$ |
3,359 |
|
|
$ |
3,828 |
|
| |
|
|
|
|
|
|
|
|
|
|
Warranty – A limited warranty is provided free of charge,
generally for periods of 12 to 24 months, for all purchasers of the Company’s
new products and systems. Accruals are recorded for estimated warranty costs at
the time revenue is recognized.
9
The following is a
summary of activity in accrued warranty expense:
|
|
|
Six Months Ended March
31, |
|
|
|
2010 |
|
2009 |
|
|
|
(dollars in
thousands) |
| Beginning balance |
|
$ |
1,429 |
|
|
$ |
1,155 |
|
| Warranty expenditures |
|
|
(267 |
) |
|
|
(323 |
) |
| Provision |
|
|
172 |
|
|
|
374 |
|
| Ending balance |
|
$ |
1,334 |
|
|
$ |
1,206 |
|
| |
|
|
|
|
|
|
|
|
Stock-Based Compensation – The Company measures compensation costs
relating to share-based payment transactions based upon the grant-date fair
value of the award. Those costs are recognized as expense over the requisite
service period, which is generally the vesting period. The benefits of tax
deductions in excess of recognized compensation cost are reported as cash flow
from financing activities rather than as cash flow from operating activities. In
the second quarter of fiscal 2009, the Company’s shareholders approved an
amendment to our 2007 Employee Stock Incentive Plan and our Non-Employee
Directors Stock Option Plan to authorize an additional 900,000 and 150,000,
shares respectively. Our stock-based compensation plans are summarized in the
table below:
|
|
|
Shares |
|
Shares |
|
|
|
Plan |
| Name of Plan |
|
Authorized |
|
Available |
|
Options Outstanding |
|
Expiration |
| 2007 Employee Stock Incentive
Plan |
|
1,400,000 |
|
901,337 |
|
343,488 |
|
Apr. 2017 |
| 1998 Employee Stock Option Plan |
|
500,000 |
|
- |
|
308,682 |
|
Jan. 2008 |
| Non-Employee Directors Stock Option
Plan |
|
350,000 |
|
151,600 |
|
110,000 |
|
Jul.
2015 |
|
|
|
|
|
1,052,937 |
|
762,170 |
|
|
| |
|
|
|
|
|
|
|
|
Share-based
compensation expense reduced the Company’s results of operations by the
following amounts:
|
|
|
Three Months Ended March
31, |
|
Six Months Ended March
31, |
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
|
(dollars in thousands, except per share
amounts) |
| Effect on income (loss) before income
taxes (1) |
|
$ |
(193 |
) |
|
$ |
(167 |
) |
|
$ |
(570 |
) |
|
$ |
(333 |
) |
| Effect on income taxes |
|
|
57 |
|
|
|
39 |
|
|
|
170 |
|
|
|
70 |
|
| Effect on net income (loss) |
|
$ |
(136 |
) |
|
$ |
(128 |
) |
|
$ |
(400 |
) |
|
$ |
(263 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(1)
|
|
Share based
compensation expense is included in selling, general and administrative
expenses. |
10
Stock options issued
under the terms of the plans have, or will have, an exercise price equal to or
greater than the fair market value of the common stock at the date of the option
grant and expire no later than 10 years from the date of grant, with the most
recent grant expiring in 2019. Options issued by the Company vest over 1 to 5
years.
Stock option
transactions and the options outstanding are summarized as follows:
|
|
|
Six Months Ended March
31, |
|
|
|
2010 |
|
2009 |
|
|
|
|
|
|
|
Weighted |
|
|
|
|
|
Weighted |
|
|
|
|
|
|
|
Average |
|
|
|
|
|
Average |
|
|
|
|
|
|
|
Exercise |
|
|
|
|
|
Exercise |
|
|
|
Options |
|
Price |
|
Options |
|
Price |
| Outstanding at beginning of
period |
|
|
691,403 |
|
|
$ |
7.03 |
|
|
486,803 |
|
|
$ |
8.39 |
| Granted |
|
|
102,000 |
|
|
|
6.44 |
|
|
183,000 |
|
|
|
3.75 |
| Exercised |
|
|
(25,608 |
) |
|
|
6.04 |
|
|
- |
|
|
|
- |
| Forfeited |
|
|
(5,625 |
) |
|
|
5.47 |
|
|
(1,000 |
) |
|
|
7.00 |
| Outstanding at end of period |
|
|
762,170 |
|
|
$ |
6.99 |
|
|
668,803 |
|
|
$ |
7.12 |
| |
| Exercisable at end of period |
|
|
436,358 |
|
|
$ |
7.21 |
|
|
317,226 |
|
|
$ |
7.23 |
| Weighted average fair value of options |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| granted during the period |
|
$ |
3.97 |
|
|
|
|
|
$ |
2.25 |
|
|
|
|
The fair value of
options was estimated at the grant date using the Black-Scholes option pricing
model with the following assumptions:
|
|
|
Six Months Ended March
31, |
|
|
|
2010 |
|
2009 |
| Risk free interest rate |
|
2.57% |
|
1.84% |
| Expected life |
|
6 years |
|
6 years |
| Dividend rate |
|
0% |
|
0% |
| Volatility |
|
68% |
|
66% |
| Forfeiture rate |
|
6% |
|
7% |
To estimate expected
lives for this valuation, it was assumed that options will be exercised at
varying schedules after becoming fully vested. Forfeitures have been estimated
at the time of grant and will be revised, if necessary, in subsequent periods if
actual forfeitures differ from those estimates. Forfeitures were estimated based
upon historical experience. Fair value computations are highly sensitive to the
volatility factor assumed; the greater the volatility, the higher the computed
fair value of the options granted.
There were zero and
20,000 options granted during the three months ended March 31, 2010 and 2009,
respectively; and 102,000 and 183,000 options granted for the six months ended
March 31, 2010 and 2009, respectively. Total fair value of options granted was
approximately $405,000 for the six months ended March 31, 2010. Total fair value
of options granted for the three and six months ended March 31, 2009 were
$38,000 and $411,000, repectively.
11
The Company awards
restricted shares under the existing share-based compensation plans. Our
restricted share-awards vest in equal annual installments over a four-year
period. The total value of these awards is expensed on a ratable basis over the
service period of the employees receiving the grants. The “service period” is
the time during which the employees receiving grants must remain employees for
the shares granted to fully vest.
Restricted stock
transactions and outstanding are summarized as follows:
|
|
|
Six Months Ended March
31, |
|
|
|
2010 |
|
2009 |
|
|
|
|
|
|
Weighted |
|
|
|
|
Weighted |
|
|
|
|
|
|
Average |
|
|
|
|
Average |
|
|
|
|
|
|
Grant Date |
|
|
|
|
Grant Date |
|
|
|
Awards |
|
Fair Value |
|
Awards |
|
Fair Value |
| Beginning Outstanding |
|
122,875 |
|
|
$ |
5.85 |
|
30,500 |
|
|
$ |
14.79 |
| Awarded |
|
24,000 |
|
|
|
6.15 |
|
100,000 |
|
|
|
3.80 |
| Released |
|
(33,625 |
) |
|
|
6.46 |
|
(7,625 |
) |
|
|
14.79 |
| Forfeited |
|
(1,250 |
) |
|
|
8.20 |
|
- |
|
|
|
- |
| Ending Outstanding |
|
112,000 |
|
|
$ |
5.70 |
|
122,875 |
|
|
$ |
5.85 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
There were zero
restricted shares awarded during the three months ended March 31, 2010 and 2009,
respectively. There were 24,000 and 100,000 restricted shares awarded during the
six months ended March 31, 2010 and 2009, respectively. Total fair value of
restricted shares awarded was approximately $0.1 million and $0.4 million for
the six months ended March 31, 2010 and 2009, respectively.
Fair Value of Financial
Instruments –
The carrying values of the
Company’s current financial instruments approximate fair value due to the short
term in which these instruments mature.
Shipping expense – Shipping expenses of $0.3 million and $0.2
million for the three months ended March 31, 2010 and 2009, respectively, are
included in selling, general and administrative expenses. Shipping expenses of
$0.5 million and $0.3 million for the six months ended March 31, 2010 and 2009,
respectively, are included in selling, general and administrative expenses.
Research and development
expense – Research and
development expenses consist of the cost of employees, consultants and
contractors who design, engineer and develop new products and processes;
materials and supplies used in those activities; and product prototyping. The
Company receives reimbursements through governmental research and development
grants which are netted against these expenses. The table below shows gross
research and development expenses and grants earned:
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
March 31, |
|
March 31, |
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
|
(dollars in thousands) |
|
(dollars in
thousands) |
| Research and development |
|
$ |
644 |
|
|
$ |
247 |
|
|
$ |
1,205 |
|
|
$ |
540 |
|
| Grants earned |
|
|
(419 |
) |
|
|
(95 |
) |
|
|
(483 |
) |
|
|
(164 |
) |
| Net research and development |
|
$ |
225 |
|
|
$ |
152 |
|
|
$ |
722 |
|
|
$ |
376 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
Impact of Recently Issued Accounting
Pronouncements
In October 2009, the
Financial Accounting Standards Board (FASB) issued Accounting Standards Update
(ASU) No. 2009-13, Revenue Recognition–Multiple Deliverable Revenue
Arrangements. This guidance updates the existing multiple-element revenue
arrangements guidance currently included in FASB ASC 605-25, Revenue
Recognition–Multiple–Element Arrangements. The revised guidance provides for two
significant changes to the existing multiple element revenue arrangements
guidance. The first change relates to the determination of when the individual
deliverables included in a multiple-element arrangement may be treated as
separate units of accounting. The second change modifies the manner in which the
transaction consideration is allocated across the separately identified
deliverables. This guidance also significantly expands the disclosures required
for multiple-element revenue arrangements. The revised multiple-element revenue
arrangements guidance will be effective for the fiscal year ending September 30,
2011, however, early adoption is permitted, provided that the revised guidance
is retroactively applied to the beginning of the year of adoption. The Company
has not yet determined the impact, if any, the adoption of this guidance will
have on its consolidated financial statements.
2. Income Taxes
The quarterly income
tax provision is calculated using an estimated annual effective tax rate, based
upon expected annual income, permanent items, statutory tax rates and planned
tax strategies in the various jurisdictions in which the Company
operates.
Deferred tax assets
and liabilities reflect the tax effects of temporary differences between the
carrying value of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes. The Company records a valuation
allowance if, based on the weight of available evidence, it is more likely than
not that some portion or all of the deferred tax asset will not be realized. Our
expectations regarding realization of our deferred tax assets is based upon the
weight of all available evidence, including such factors as our recent earnings
history and expected future taxable income. The company maintains a valuation
allowance with respect to certain state and foreign net operating losses that
may not be recovered. Each quarter the valuation allowance is re-evaluated.
During the quarter ended March 31, 2010, no significant changes were made to the
valuation allowance.
The Company
classifies uncertain tax positions as non-current income taxes payable unless
expected to be paid within one year. At March 31, 2010, and September 30, 2009,
the total amount of unrecognized tax benefits was $0.5 million. If recognized,
these amounts would favorably impact the effective tax rate.
The Company
classifies interest and penalties related to unrecognized tax benefits in income
tax expense. As of March 31, 2010 and September 30, 2009, the Company accrued
$0.1 million for potential interest and penalties.
3. Earnings Per Share
Basic earnings per
share (EPS) is computed by dividing net income (loss) by the weighted average
number of common shares outstanding for the period. Diluted EPS is computed
similarly to basic EPS except that the denominator is increased to include the
number of additional common shares that would have been outstanding if
potentially dilutive common shares had been issued. In the case of a net loss,
diluted earnings per share is calculated in the same manner as basic EPS.
Common shares
relating to stock options where the exercise prices exceeded the average market
price of our common shares during the period were excluded from the diluted
earnings per share calculation as the related impact was anti-dilutive. For the
three and six months ended March 31, 2010, options for 149,000 and 267,000
shares, respectively, and 14,000 and 4,125 restricted stock award shares,
respectively, are excluded from the diluted EPS calculations because they are
anti-dilutive. For the three and six months ended March 31, 2009, options for
664,000 and 655,000 shares, respectively, and 40,000 and 30,500 restricted stock
award shares, respectively, are excluded from the diluted EPS calculations
because they are anti-dilutive.
13
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
March 31, |
|
March 31, |
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
|
(in thousands, except per share
amounts) |
|
(in thousands, except per share
amounts) |
| Basic Earnings Per Share
Computation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) available to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| common stockholders |
|
$ |
206 |
|
$
|
(2,012 |
) |
|
$ |
285 |
|
$ |
(1,153 |
) |
| |
| Weighted Average Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
|
9,018 |
|
|
9,057 |
|
|
|
8,995 |
|
|
9,078 |
|
| |
| Basic earnings (loss) per share |
|
$ |
0.02 |
|
$ |
(0.22 |
) |
|
$ |
0.03 |
|
$ |
(0.13 |
) |
| |
| Diluted Earnings Per Share
Computation |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income (loss) |
|
$ |
206 |
|
$ |
(2,012 |
) |
|
$ |
285 |
|
$ |
(1,153 |
) |
| |
| Weighted Average Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common stock |
|
|
9,018 |
|
|
9,057 |
|
|
|
8,995 |
|
|
9,078 |
|
| Common stock equivalents
(1) |
|
|
221 |
|
|
- |
|
|
|
161 |
|
|
- |
|
| Diluted shares |
|
|
9,239 |
|
|
9,057 |
|
|
|
9,156 |
|
|
9,078 |
|
| |
| Diluted earnings (loss) per share |
|
$ |
0.02 |
|
$ |
(0.22 |
) |
|
$ |
0.03 |
|
$ |
(0.13 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(1) |
|
The number of common stock equivalents
is calculated using the treasury stock method and the average market price
during the period. |
4. Comprehensive Income
(Loss)
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
March 31, |
|
March 31, |
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
|
|
|
(dollars in thousands) |
|
(dollars in
thousands) |
| Net income (loss), as reported |
|
$ |
206 |
|
|
$ |
(2,012 |
) |
|
$ |
285 |
|
|
$ |
(1,153 |
) |
| Foreign currency translation adjustment |
|
|
(2,173 |
) |
|
|
(2,337 |
) |
|
|
(2,821 |
) |
|
|
(2,728 |
) |
| Comprehensive loss |
|
$ |
(1,967 |
) |
|
$ |
(4,349 |
) |
|
$ |
(2,536 |
) |
|
$ |
(3,881 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5. Business Segment
Information
The Company’s
products are classified into two core business segments; the solar and
semiconductor equipment segment and the polishing supplies segment. The solar
and semiconductor equipment segment designs, manufactures and markets
semiconductor wafer processing and handling equipment used in the fabrication of
solar cells, integrated circuits, and MEMS. Also included in the solar and
semiconductor equipment segment are the manufacturing support service operations
and corporate expenses, except for a small portion that is allocated to the
polishing supplies segment. The polishing supplies segment designs, manufactures
and markets carriers, templates and equipment used in the lapping and polishing
of wafer-thin materials, including silicon wafers used in the production of
semiconductors.
14
Information
concerning our business segments is as follows:
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
March 31, |
|
March 31, |
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
| |
|
(dollars in thousands) |
|
(dollars in
thousands) |
| Net
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Solar and semiconductor
equipment |
|
$ |
14,540 |
|
|
$ |
9,341 |
|
|
$ |
28,515 |
|
|
$ |
25,474 |
|
| Polishing
supplies |
|
|
1,537 |
|
|
|
1,563 |
|
|
|
3,019 |
|
|
|
3,302 |
|
|
|
|
$ |
16,077 |
|
|
$ |
10,904 |
|
|
$ |
31,534 |
|
|
$ |
28,776 |
|
| |
| Operating income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Solar and semiconductor
equipment (1) |
|
$ |
220 |
|
|
$ |
(2,536 |
) |
|
$ |
187 |
|
|
$ |
(1,130 |
) |
| Polishing
supplies |
|
|
202 |
|
|
|
(42 |
) |
|
|
362 |
|
|
|
(70 |
) |
|
|
|
|
422 |
|
|
|
(2,578 |
) |
|
|
549 |
|
|
|
(1,200 |
) |
| |
| Interest and other income (expense),
net |
|
|
(76 |
) |
|
|
(14 |
) |
|
|
(74 |
) |
|
|
47 |
|
| |
| Income (loss) before
income taxes |
|
$ |
346 |
|
|
$ |
(2,592 |
) |
|
$ |
475 |
|
|
$ |
(1,153 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
(1)
|
|
Includes the
impairment losses of $1,682 in Fiscal 2009 related to the Bruce
Technologies intangible assets and
goodwill. |
|
|
|
March 31, |
|
September 30, |
|
|
|
2010 |
|
2009 |
| |
|
(dollars in
thousands) |
| Identifiable Assets: |
|
|
|
|
|
|
| Solar and semiconductor
equipment |
|
$ |
103,849 |
|
$ |
88,617 |
| Polishing
supplies |
|
|
4,559 |
|
|
3,909 |
|
|
|
$ |
108,408 |
|
$ |
92,526 |
| |
| Goodwill: |
|
|
|
|
|
|
| Solar and semiconductor
equipment |
|
$ |
4,064 |
|
$ |
4,408 |
| Polishing
supplies |
|
|
728 |
|
|
728 |
|
|
|
$ |
4,792 |
|
$ |
5,136 |
| |
|
|
|
|
|
|
6. Major Customers and Foreign Sales
During the three
months ended March 31, 2010, three customers, individually, represented 16%, 12%
and 11% of net revenues. During the six months ended March 31, 2010, two
customers, individually, represented 21% and 18% of net revenues. During the
three months ended March 31, 2009, two customers, individually, represented 25%
and 12% of net revenues. During the six months ended March 31, 2009, two
customers , individually, represented 24% and 12% of net revenues.
15
Our net revenues were
to customers in the following geographic regions:
|
|
|
Six Months Ended March
31, |
|
|
|
2010 |
|
2009 |
|
Total North America |
|
10 |
% |
|
24 |
% |
| China |
|
57 |
% |
|
15 |
% |
| Taiwan |
|
7 |
% |
|
34 |
% |
| Other |
|
7 |
% |
|
6 |
% |
|
Total Asia |
|
71 |
% |
|
55 |
% |
|
Total Europe |
|
19 |
% |
|
21 |
% |
|
|
|
100 |
% |
|
100 |
% |
| |
|
|
|
|
|
|
7. Commitments and
Contingencies
Purchase Obligations – As of March 31, 2010, we had purchase
obligations in the amount of $27.7 million compared to $4.7 million as of
September 30, 2009. These purchase obligations consist of outstanding purchase
orders for goods and services. While the amount represents purchase agreements,
the actual amounts to be paid may be less in the event that any agreements are
renegotiated, cancelled or terminated.
Leases – On,
April 1, 2010, the Company entered into a new operating lease for a building
located in Vaassen, The Netherlands. The lease is for two years and the Company
is required to make quarterly lease payments of $30,000. This building is being
used as manufacturing facilities for our Tempress operations.
In fiscal 2010, the
Company extended the lease of warehouse space in Vaassen, the Netherlands and
expanded the space. The original lease expired on October 31, 2011 and was
extended to March 31, 2013. The lease payments increased from $20,000 per
quarter to $30,000 per quarter due to the expansion.
License agreement – The Company entered into amendments with PST
Co., LTD (PST) to both the PSG (Phosphosilicate glass) license and the
PECVD (plasma enhanced chemical vapor deposition) license to
expand the licenses to include one future model of the PSG dry etch systems and
three future models of the PECVD system. These amendments to the licenses
require the Company to pay additional license fees upon successful achievement
of the agreed upon specifications of each of the four new models. The four
payments range from three hundred million South Korean Won (KRW), approximately
$230,000, to one billion KRW, approximately $780,000, for maximum total payments
of approximately $1,420,000. Such payments will be recorded as additional
intangibles, the cost of which will be amortized over the life of the
license.
Litigation – The
Company is a party to various claims arising in the normal course of business.
Management believes the resolution of these matters will not have a material
impact on the Company’s results of operations or financial
condition.
16
The following
discussion and analysis of our financial condition and results of operations
should be read in conjunction with our condensed consolidated financial
statements and the related notes included in Item 1, “Condensed Financial
Statement” in this quarterly report on Form 10-Q and our consolidated financial
statements and related notes included in Item 8, “Financial Statements and
Supplementary Data” in our Annual Report on Form 10-K for the fiscal year ended
September 30, 2009.
Cautionary
Statement Regarding Forward-Looking Statements
The statements in this report include
forward-looking statements. These forward-looking statements are based on our
management’s current expectations and beliefs and involve numerous risks and
uncertainties that could cause actual results to differ materially from
expectations. You should not rely upon these forward-looking statements as
predictions of future events because we cannot assure you that the events or
circumstances reflected in these statements will be achieved or will occur. You
can identify forward-looking statements by the use of forward-looking
terminology, including the words “believes,” “expects,” “may,” “will,” “should,”
“seeks,” “intends,” “plans,” “estimates” or “anticipates” or the negative of
these words and phrases or other variations of these words and phrases or
comparable terminology. These forward-looking statements relate to, among other
things: our sales, results of operations and anticipated cash flows; capital
expenditures; depreciation and amortization expenses; research and development
expenses; selling, general and administrative expenses; the development and
timing of the introduction of new products and technologies; our ability to
maintain and develop relationships with our existing and potential future
customers and our ability to maintain the level of investment in research and
development and capacity that is required to remain competitive. Many factors
could cause our actual results to differ materially from those projected in
these forward-looking statements, including, but not limited to: whether we will
be able to complete acquisitions and integrate such businesses successfully and
achieve anticipated synergies; variability of our revenues and financial
performance; risks associated with product development and technological
changes; the acceptance of our products in the marketplace by existing and
potential future customers; disruption of operations or increases in expenses
caused by civil or political unrest or other catastrophic events; general
economic conditions and conditions in the solar and semiconductor industries in
particular; the continued employment of our key personnel and risks associated
with competition.
For a discussion of the factors that could
cause actual results to differ materially from the forward-looking statements,
see the “Risk Factors” set forth in Item 1A of Part I of Amtech Systems, Inc.’s
Annual Report on Form 10-K for the fiscal year ended September 30, 2009, the
“Liquidity and Capital Resources” section under “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” in this item of this
report and the other risks and uncertainties that are set forth elsewhere in
this report or detailed in our other Securities and Exchange Commission reports
and filings. We assume no obligation to update these forward-looking
statements.
Introduction
Management’s
Discussion and Analysis (“MD&A”) is intended to facilitate an understanding
of our business and results of operations. MD&A consists of the following
sections:
- Overview
- Results of
Operations
- Liquidity and Capital
Resources
17
- Off – Balance Sheet
Arrangements
- Contractual
Obligations
- Critical Accounting
Policies
- Impact of Recently Issued
Accounting Pronouncements
We operate in two
segments: the solar and semiconductor equipment segment and the polishing
supplies segment. Our solar and semiconductor equipment segment is a leading
supplier of thermal processing systems, including related automation, parts and
services, to the solar/photovoltaic, semiconductor, silicon wafer and MEMS
industries and also offers PECVD (plasma enhanced chemical vapor deposition) and
PSG (phosphosilcate glass) equipment.
Our polishing
supplies and equipment segment is a leading supplier of wafer polishing carriers
to manufacturers of silicon wafers. The polishing segment also manufactures
polishing templates, steel carriers and double-sided polishing and lapping
machines for fabricators of LED, optics, quartz, ceramics and metal parts, and
for manufacturers of medical equipment components.
Our customers are
primarily manufacturers of solar cells and integrated circuits. The solar cell
and semiconductor industries are cyclical and historically have experienced
significant fluctuations. Our revenue is impacted by these broad industry
trends.
Due to the nature of
the capital equipment markets that we serve, our revenues, gross margins and
operating results have historically fluctuated on a quarterly basis. Our
contracts typically include holdbacks of 10-20% of revenue, which are recognized
at the time of customer acceptance.
The following table
sets forth certain operational data as a percentage of net revenue for the
periods indicated:
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
March 31, |
|
March 31, |
|
March 31, |
|
March 31, |
|
|
|
2010 |
|
2009 |
|
2010 |
|
2009 |
| Net revenue |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
| Cost of goods sold |
|
71 |
% |
|
78 |
% |
|
70 |
% |
|
71 |
% |
| Gross margin |
|
29 |
% |
|
22 |
% |
|
30 |
% |
|
29 |
% |
| Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
26 |
% |
|
28 |
% |
|
25 |
% |
|
26 |
% |
| Restructuring charge |
|
0 |
% |
|
16 |
% |
|
0 |
% |
|
6 |
% |
|
Research and Development |
|
1 |
% |
|
2 |
% |
|
3 |
% |
|
1 |
% |
| Total operating expenses |
|
27 |
% |
|
46 |
% |
|
28 |
% |
|
33 |
% |
| Income (loss) from operations |
|
2 |
% |
|
-24 |
% |
|
2 |
% |
|
-4 |
% |
| Interest income (expense), net |
|
0 |
% |
|
0 |
% |
|
0 |
% |
|
0 |
% |
| Income (loss) before income
taxes |
|
2 |
% |
|
-24 |
% |
|
2 |
% |
|
-4 |
% |
| Income tax expense (benefit) |
|
1 |
% |
|
-6 |
% |
|
1 |
% |
|
0 |
% |
| Net Income (loss) |
|
1 |
% |
|
-18 |
% |
|
1 |
% |
|
-4 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
18
Net Revenue
Net revenue consists
of revenue recognized upon shipment or installation of products using proven
technology and upon acceptance of products using new technology. In addition,
spare parts sales are recognized upon shipment. Service revenue is recognized
upon completion of the service activity or ratably over the term of the service
contract. The majority of our revenue is generated from large furnace system
sales which, depending on the timing of shipment and installation, can have a
significant impact on our revenue and earnings in any given period. See Critical
Accounting Policies – Revenue Recognition.
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
|
|
|
|
|
|
|
|
March |
|
March |
|
|
|
|
|
|
|
|
March |
|
March |
|
|
|
|
|
|
|
|
|
|
31, |
|
31, |
|
Inc. |
|
|
|
|
31, |
|
31, |
|
Inc. |
|
|
|
| Segment |
|
2010 |
|
2009 |
|
(Dec.) |
|
% |
|
2010 |
|
2009 |
|
(Dec.) |
|
% |
| Solar and Semiconductor |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Segment |
|
$ |
14,540 |
|
$
|
9,341 |
|
$ |
5,199 |
|
|
56 |
% |
|
$ |
28,515 |
|
$ |
25,474 |
|
$
|
3,041 |
|
|
12 |
% |
| Polishing Supplies Segment |
|
|
1,537 |
|
|
1,563 |
|
|
(26 |
) |
|
(2 |
%) |
|
|
3,019 |
|
|
3,302 |
|
|
(283 |
) |
|
(9 |
%) |
|
Total Net Revenue |
|
$ |
16,077 |
|
$ |
10,904 |
|
$ |
5,173 |
|
|
47 |
% |
|
$ |
31,534 |
|
$ |
28,776 |
|
$ |
2,758 |
|
|
10 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue for the
quarter ended March 31, 2010 increased $5.2 million, or 47%, compared to the
quarter ended March 31, 2009. Revenue from the solar and semiconductor equipment
segment increased $5.2 million, or 56%, due to significantly higher shipments to
the solar industry, partially offset by lower shipments to the semiconductor
industry and a decrease in recognition of previously deferred revenue. Within
the solar and semiconductor equipment segment, net revenue from the solar market
was $10.9 million for the three months ended March 31, 2010, a $6.4 million or
139% increase from the three months ended March 31, 2009.
Net revenue for the
six months ended March 31, 2010 increased by $2.8 million, or 10%, compared to
the six months ended March 31, 2009. Revenue from the solar and semiconductor
equipment segment increased $3.0 million, or 12% due, in part, to improvement in
economic activity since the first half of fiscal 2009. The decrease of $0.3
million, or 9%, in net revenue from the Polishing Supplies Segment is due to a
significant decrease in machine sales, partially offset by increased demand for
templates and carriers.
Backlog and Orders
Our order backlog as
of March 31, 2010 and 2009 was $87.2 million and $34.7 million, respectively.
Our backlog as of March 31, 2010 includes approximately $81.6 million of orders
from our solar industry customers, compared to $32.6 million at March 31, 2009.
New orders booked in the quarter ended March 31, 2010 were $34.0 million
compared to $5.8 million in the second quarter of fiscal 2009. New orders booked
in the six-month periods ended March 31, 2010 and 2009 were $93.3 million and
$16.7 million, respectively. As the majority of the backlog is denominated in
euros, the strengthening of the dollar during the first half of fiscal 2010 and
2009 resulted in a reduction in backlog of approximately $6.6 million and $4.2
million, respectively.
The orders included
in our backlog are generally credit approved customer purchase orders expected
to ship within the next twelve months. Because our orders are typically subject
to cancellation or delay by the customer, our backlog at any particular point in
time is not necessarily representative of actual sales for succeeding periods,
nor is backlog any assurance that we will realize profit from completing these
orders. Our backlog also includes revenue deferred pursuant to our revenue
recognition policy, derived from orders that have already been shipped, but
which have not met the criteria for revenue recognition.
As of March 31, 2010,
one customer accounts for 44% of our order backlog.
19
Gross Profit and Gross Margin
Gross profit is the
difference between net revenue and cost of goods sold. Cost of goods sold
consists of purchased material, labor and overhead to manufacture equipment and
spare parts and the cost of service and support to customers for installation,
warranty and paid service calls. Gross margin is gross profit as a percent of
net revenue.
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
March 31, |
|
March 31, |
|
Inc. |
|
|
|
|
March 31, |
|
March 31, |
|
Inc. |
|
|
|
| |
|
2010 |
|
2009 |
|
(Dec.) |
|
% |
|
2010 |
|
2009 |
|
(Dec.) |
|
% |
| Segment |
|
(dollars in thousands) |
|
|
|
|
(dollars in thousands) |
|
|
|
| Solar and Semiconductor |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Segment |
|
$ |
4,176 |
|
|
$ |
2,067 |
|
|
$ |
2,109 |
|
102 |
% |
|
$ |
8,311 |
|
|
$ |
7,845 |
|
|
$ |
466 |
|
6 |
% |
| Polishing Supplies Segment |
|
|
532 |
|
|
|
290 |
|
|
|
242 |
|
83 |
% |
|
|
997 |
|
|
|
598 |
|
|
|
399 |
|
67 |
% |
|
Total Gross
Profit |
|
$ |
4,708 |
|
|
$ |
2,357 |
|
|
$ |
2,351 |
|
100 |
% |
|
$ |
9,308 |
|
|
$ |
8,443 |
|
|
$
|
865 |
|
10 |
% |
|
Gross Margin |
|
|
29 |
% |
|
|
22 |
% |
|
|
|
|
|
|
|
|
30 |
% |
|
|
29 |
% |
|
|
|
|
|
|
Gross profit for the
three months ended March 31, 2010 increased $2.4 million or 100% versus the
three months ended March 31, 2009. The increase was driven primarily by higher
volumes which resulted in more efficient capacity utilization, partially offset
by lower recognition of previously deferred profit. We recognized $0.3 million
of previously deferred profit, net of deferrals, for the quarter ended March 31,
2010, compared to a net recognition of $0.5 million of profit for the quarter
ended March 31, 2009. Gross profit and gross margins in the Polishing Supplies
Segment were positively impacted by favorable product mix as volumes of
higher-margin carriers and templates increased while sales of polishing
machines, which generally carry a lower gross margin, decreased.
Gross profit for the
six months ended March 31, 2010 increased $0.9 million or 10% versus the six
months ended March 31, 2009. We recognized $0.5 million of previously deferred
profit, net of deferrals, for the six months ended March 31, 2010, compared to a
net deferral of $0.3 million of profit for the six months ended March 31,
2009.
Selling, General and Administrative
Selling, general and
administrative expenses consist of the cost of employees, consultants and
contractors, facility costs, sales commissions, promotional marketing expenses,
legal and accounting expenses.
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
March 31, |
|
March 31, |
|
Inc. |
|
|
|
|
March 31, |
|
March 31, |
|
Inc. |
|
|
|
|
|
|
2010 |
|
2009 |
|
(Dec.) |
|
% |
|
2010 |
|
2009 |
|
(Dec.) |
|
% |
| Segment |
|
(dollars in thousands) |
|
|
|
|
(dollars in thousands) |
|
|
|
|
| Solar and Semiconductor |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equipment Segment |
|
$ |
3,731 |
|
|
$ |
2,769 |
|
|
$ |
962 |
|
|
35 |
% |
|
$ |
7,402 |
|
|
$ |
6,916 |
|
|
$ |
486 |
|
|
7 |
% |
| Polishing Supplies Segment |
|
|
330 |
|
|
|
332 |
|
|
|
(2 |
) |
|
(1 |
%) |
|
|
635 |
|
|
|
669 |
|
|
|
(34 |
) |
|
(5 |
%) |
|
Total
SG&A |
|
$ |
4,061 |
|
|
$ |
3,101 |
|
|
$ |
960 |
|
|
31 |
% |
|
$ |
8,037 |
|
|
$ |
7,585 |
|
|
$
|
452 |
|
|
6 |
% |
|
Percent of net revenue |
|
|
26 |
% |
|
|
28 |
% |
|
|
|
|
|
|
|
|
|
25 |
% |
|
|
26 |
% |
|
|
|
|
|
|
|
Selling, general and
administrative (SG&A) expenses for the three months ended March 31, 2010
increased $1.0 million, or 31% compared to the three months ended March 31,
2009. SG&A expenses include $0.2 million of stock-based compensation expense
in the three months ended March 31, 2010 and 2009. The increase in SG&A
expenses was due primarily to increases in commissions related to higher
revenues generated in regions where third party sales agents are utilized and
compensation expense.
For the six months
ended March 31, 2010, SG&A increased $0.5 million or 6% compared to the six
month period ended March 31, 2009. SG&A expenses include $0.6 million and
$0.3 million of stock-based compensation expense for the six months ended March
31, 2010 and 2009, respectively. The increase in SG&A is due to increased
compensation expense.
Research and Development
Research and
development expenses consist of the cost of employees, consultants and
contractors who design, engineer and develop new products and processes;
materials and supplies used in those activities; and product
prototyping.
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
|
March 31, |
|
March 31, |
|
Inc. |
|
|
|
|
March 31, |
|
March 31, |
|
Inc. |
|
|
|
|
|
|
2010 |
|
2009 |
|
(Dec.) |
|
% |
|
2010 |
|
2009 |
|
(Dec.) |
|
% |
|
|
|
(dollars in thousands) |
|
|
|
|
(dollars in thousands) |
|
|
|
| Research and |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Development Expense |
|
$
|
644 |
|
|
$
|
247 |
|
|
$
|
397 |
|
|
161 |
% |
|
$
|
1,205 |
|
|
$
|
540 |
|
|
$ |
665 |
|
|
123 |
% |
| Grants Earned |
|
|
(419 |
) |
|
|
(95 |
) |
|
|
(324 |
) |
|
341 |
% |
|
|
(483 |
) |
|
|
(164 |
) |
|
|
(319 |
) |
|
194 |
% |
| Net
Research and Development |
|
$ |
225 |
|
|
$ |
152 |
|
|
$ |
73 |
|
|
48 |
% |
|
$ |
722 |
|
|
$ |
376 |
|
|
$ |
346 |
|
|
92 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
Research and development spending in fiscal 2010 has increased
significantly from spending in fiscal 2009 due to increased research in the
technology of solar (photovoltaic) cell manufacturing to increase cell
efficiency. We receive reimbursements through governmental research and
development grants which are netted against these expenses. As we have increased
our research and development activity, we have also increased our efforts to
receive grants to fund this research. As a result, the amount of grants earned
in fiscal 2010 has significantly increased.
Income Taxes
For the three months
ended March 31, 2010 and 2009, we recorded income tax expense (benefit) of $0.1
million and ($0.6) million, for effective tax rates of 41% and (22%),
respectively. During the six months ended March 31, 2010 and 2009, we recorded
income tax expense of $0.2 million and zero. The effective tax rates used in
calculating the income tax provision for the six months ended March 31, 2010 and
2009 were 40% and 0%, respectively, based upon estimates of annual income,
annual permanent differences, changes in the valuation allowance and statutory
tax rates for fiscal 2010 and 2009 for the various jurisdictions in which we
operate. The effective tax rate for the six months ended March 31, 2009 was
negatively impacted by an increase in the valuation allowance and permanent
differences between financial income and taxable income, which were higher in
relation to the pre-tax loss. Without these adjustments a tax benefit would have
been recorded for the period.
Liquidity
and Capital Resources
At March 31, 2010 and
September 30, 2009, cash and cash equivalents were $43.1 million and $42.3
million, respectively. Restricted cash increased $3.6 million due to receipt of
customer deposits requiring a bank guarantee. Our working capital was $54.4
million as of March 31, 2010 and $55.9 million as of September 30, 2009. The
increase in cash was primarily provided by cash from operations of $4.6 million,
discussed below. This was offset by purchases of property, plant and equipment
of $2.1 million and an investment in a short term note receivable of $1.0
million. Our ratio of current assets to current liabilities decreased to 2.5:1
as of March 31, 2010 from 4.1:1 as of September 30, 2009. The decline in our
current ratio was due to the simultaneous increase in our current assets and
current liabilities as we ramped up inventory purchases to meet the growing
order backlog. Current assets increased $16.3 million while current liabilities
increased $17.7 million; or a ratio of 0.9:1. The increase in customer orders is
expected to result in higher operating levels and a significant reduction in
cash due to increases in inventories and receivables and potential capital
expenditures. We have never paid dividends on our Common Stock. Our present
policy is to apply cash to investment in product development, acquisition or
expansion; consequently, we do not expect to pay dividends on Common Stock in
the foreseeable future. We continue to have minimal long-term obligations to
service. We believe that our principal sources of liquidity discussed above are
sufficient to support operations.
The success of our
growth strategy is dependent upon the availability of additional capital
resources on terms satisfactory to management. Our sources of capital in the
past have included the sale of equity securities, which include common and
preferred stock sold in private transactions and public offerings, capital
leases and long-term debt. There can be no assurance that we can raise such
additional capital resources on satisfactory terms.
Cash Flows from Operating Activities
Cash provided by our
operating activities was $4.6 million for the six months ended March 31, 2010,
compared to $1.5 million provided by such activities for the six months ended
March 31, 2009. During the six months ended March 31, 2010 cash was primarily
generated by customer deposits received with orders and an increase in accounts
payable. These increases were offset by an increase in restricted cash due to
customers requiring bank guarantees for their deposits; an increase in inventory
necessary to fulfill our backlog of orders; an increase in account receivable
due to a high concentration of shipments at the end of the quarter; as well as
an increase in vendor prepayments to take advantage of available discounts. In
the first six months of fiscal 2009, cash was generated by decreases in accounts
receivable and current restricted cash as well as earnings from operations,
adjusted for non-cash charges, partially offset by decreases in accounts
payable, accrued liabilities and customer deposits, and increases in
inventories.
22
Cash Flows from Investing
Activities
Our investing
activities for the six months ended March 31, 2010 and 2009 used $3.1 million
and $1.4 million respectively. In the first six months of fiscal 2010 the
company had capital expenditures of $2.1 million, including land in the
Netherlands adjacent to our current manufacturing facilities for $1.0 million in
the second quarter of 2010. We plan to use this land to expand our current
facilities due to our rapid growth. The remainder of the capital expenditures
was for machinery and equipment and infrastructure due to our capacity
expansion, primarily at our Netherlands location. In the second quarter of
fiscal 2010, we provided a $1.0 million short-term loan to one of our technology
partners. The loan carries an annual interest rate of 4.5%, with the first
interest payment due on April 1, 2010 and the remainder of the interest and
principal to be paid on June 30, 2010. The loan is collateralized by the
intellectual property of our technology partner and is guaranteed by its CEO.
The CEO of our technology partner pledged as significant portion of his
ownership interest in the company as additional security. The first interest
payment was received in April 2010. For the six months ended March 31, 2009,
capital expenditures amounted to $0.8 million primarily for machinery and
equipment and we made $0.6 million of payments for our licensing agreements with
PST.
Cash Flows from Financing Activities
For the six months
ended March 31, 2010, $0.1 million of cash was provided by financing activities.
The primary source of cash received was proceeds from the issuance of common
stock through the exercise of stock options. This compares to $0.5 million of
cash used in the first six months of fiscal 2009 primarily due to the purchase
of commons stock under our stock repurchase program.
Off-Balance
Sheet Arrangements
As of March 31, 2010,
Amtech had no off-balance sheet arrangements as defined in Item 303(a)(4) of
Regulation S-K promulgated by the Securities and Exchange
Commission.
The only significant
changes in contractual obligations since September 30, 2009 have been changes in
purchase obligations, new building lease and additional obligations related to
newly licensed products (See Note 7 of the Condensed Consolidated Financial
Statements). Refer to Amtech’s annual report on Form 10-K for the year ended
September 30, 2009, for information on the Company’s other contractual
obligations.
Critical
Accounting Policies
“Management’s Discussion and Analysis of
Financial Condition and Results of Operations” discusses our consolidated
financial statements that have been prepared in accordance with accounting
principles generally accepted in the United States of America. The preparation
of these consolidated financial statements requires us to make estimates and
assumptions that affect the reported amount of assets and liabilities at the
date of the consolidated financial statements, the disclosure of contingent
assets and liabilities at the date of the consolidated financial statements and
the reported amounts of revenue and expenses during the reporting
period.
On an on-going basis,
we evaluate our estimates and judgments, including those related to revenue
recognition, inventory valuation, accounts receivable collectability, warranty
and impairment of long-lived assets. We base our estimates and judgments on
historical experience and on various other factors that we believe to be
reasonable under the circumstances. The results of these estimates and judgments
form the basis for making conclusions about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions.
23
A
critical accounting policy is one that is both important to the presentation
of our financial position and results of operations, and requires management’s
most difficult, subjective or complex judgments, often as a result of the need
to make estimates about the effect of matters that are inherently uncertain.
These uncertainties are discussed in Part I, Item 1A of our Annual Report on
Form 10-K for the year ended September 30, 2009. We believe the following
critical accounting policies affect the more significant judgments and estimates
used in the preparation of our consolidated financial statements.
We believe the
critical accounting policies discussed in the section entitled “Item 7:
Management’s Discussion and Analysis of Financial Condition and Results of
Operations – Critical Accounting Policies” in our Annual Report on Form 10-K for
the fiscal year ended September 30, 2009 represent the most significant
judgments and estimates used in the preparation of our consolidated financial
statements. There have been no significant changes in our critical accounting
policies during the six months ended March 31, 2010.
Impact
of Recently Issued Accounting Pronouncements
For discussion of the
impact of recently issued accounting pronouncements, see “Item 1: Financial
Information” under “Impact of Recently Issued Accounting Pronouncements”.
24
We are exposed to
financial market risks, including changes in foreign currency exchange rates and
interest rates. Our operations in the United States are conducted in U.S.
dollars. Our operations in Europe, the primary component of the solar and
semiconductor equipment segment, conduct business primarily in the Euro. The
functional currency of our European operation is the Euro. Nearly all of the
transactions, assets and liabilities of all other operating units are
denominated in the U.S. dollar, their functional currency. The following
disclosures about market risk should be read in conjunction with the more in
depth discussion in Item 7A, Quantitative and Qualitative Disclosures About
Market Risk in our Annual Report on Form 10-K for the fiscal year ended
September 30, 2009.
As of March 31, 2010,
we did not hold any stand-alone or separate derivative instruments. We incurred
net foreign currency transaction losses of $0.2 million and less than $0.1
million respectively during the six months ended March 31, 2010 and 2009. As of
March 31, 2010, our foreign subsidiaries had $1.5 million of assets (cash,
receivables and prepaid assets) denominated in currencies other than the
functional currency. A 10% change in the value of the functional currency
relative to the non-functional currency would result in a gain or loss of $0.2
million. As of March 31, 2010, we had $3.6 million of accounts payable,
consisting primarily of amounts owed by our foreign subsidiaries to our U.S.
companies, denominated in U.S. dollars. Although the intercompany accounts are
eliminated in consolidation, a 10% change in the value of the euro relative to
the U.S. dollar would result in a gain or loss of $0.4 million.
We incurred a foreign
currency translation loss of $2.8 million and $2.7 million during the six months
ended March 31, 2010 and 2009, respectively. Our net investment in and advances
to our foreign operations totaled $42.9 million as of March 31, 2010. A 10%
change in the value of the euro relative to the U.S. dollar would cause
approximately a $4.3 million foreign currency translation adjustment, a type of
other comprehensive income (loss), which would be a direct adjustment to our
stockholders’ equity.
During six months
ended March 31, 2010 and 2009, our European operations transacted U.S. dollar
denominated sales and purchases of $0.2 million and $0.6 million, respectively.
As of March 31, 2010, sales commitments denominated in a currency other than the
function currency of our transacting operation totaled less than $0.1 million.
Our lead-times to fulfill these commitments generally range between 13 and 26
weeks. A 10% change in the relevant exchange rates between the time the order
was taken and the time of shipment would cause our gross profit on such orders
to be less than $0.1 million greater than or less than expected on the date the
order was taken. As of March 31, 2010, purchase commitments denominated in a
currency other than the function currency of our transacting operation totaled
$3.1 million. A 10% change in the relevant exchange rates between the time the
purchase order was placed and the time the order is received would cause our
cost of such items to be no more than $0.3 million greater than or less than
expected on the date the purchase order was placed.
ITEM
4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
Our management,
including the Chief Executive Officer (“CEO”) and the Chief Financial Officer
(“CFO”), has carried out an evaluation of the effectiveness of our disclosure
controls and procedures as of December 31, 2010, pursuant to Exchange Act Rules
13a-15(e) and 15(d)-15(e). Based upon that evaluation, our CEO and CFO have
concluded that as of such date, our disclosure controls and procedures in place
are effective.
Changes in Internal Control Over Financial
Reporting
There has been no
change in Amtech’s internal control over financial reporting during the three
months ended March 31, 2010 that has materially affected, or is reasonably
likely to materially affect, its internal control over financial
reporting.
25
The most significant
risk factors applicable to Amtech are described in Part I, Item 1A (Risk
Factors) of Amtech’s Annual Report on Form 10-K for the fiscal year ended
September 30, 2009 (our “2009 Form 10-K”). There have been no material changes
to the risk factors previously disclosed on our 2009 Form 10-K.
|
Item
6.
|
|
Exhibits |
|
|
| 10.1 |
|
Amtech Systems, Inc. Non-Employee Directors Stock Option Plan, as
amended through March 11, 2010. |
|
* |
| |
|
|
|
|
| 10.2 |
|
Amtech Systems, Inc. 2007 Employee Stock Incentive Plan, as
amended through March 11, 2010 . |
|
* |
| |
|
|
|
|
| 10.3 |
|
Amended and Restated Employment Agreement between the Company and
Jong S. Whang. |
|
* |
| |
|
|
|
|
| 10.4 |
|
Amended and Restated Change of Control and Severance Agreement
between the Company and Robert T. Hass. |
|
* |
| |
|
|
|
|
| 31.1 |
|
Certification
of Chief Executive Officer Pursuant to Rule 13a-14(a)/15d-14(a) of the
Securities Exchange Act of 1934, as Amended
|
|
** |
|
|
|
|
|
|
| 31.2 |
|
Certification of Chief Financial Officer
Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of
1934, as Amended
|
|
** |
|
|
|
|
|
|
| 32.1 |
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
** |
|
|
|
|
|
|
| 32.2 |
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
** |
____________________
| * |
|
Incorporated by reference to the
Company’s report on
Form 8-K, filed with the Securities and Exchange on March 17,
2010. |
| ** |
|
Filed
herewith. |
26
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
| |
AMTECH SYSTEMS, INC. |
|
|
|
|
|
|
|
|
|
|
|
|
By |
/s/ Robert T.
Hass |
|
Dated: |
May 11, 2010 |
|
|
|
|
Robert T. Hass |
|
|
|
|
|
Chief Accounting Officer |
|
|
|
|
|
(Principal Accounting Officer) |
|
|
27
| Exhibit |
|
|
|
Page or |
| Number |
|
Description |
|
Method of Filing |
| 10.1 |
|
Amtech
Systems, Inc. Non-Employee Directors Stock Option Plan, as amended through
March 11, 2010. |
|
* |
| |
|
|
|
|
| 10.2 |
|
Amtech
Systems, Inc. 2007 Employee Stock Incentive Plan, as amended through
March 11, 2010 . |
|
* |
| |
|
|
|
|
| 10.3 |
|
Amended
and Restated Employment Agreement between the Company and Jong S. Whang.
|
|
* |
| |
|
|
|
|
| 10.4 |
|
Amended
and Restated Change of Control and Severance Agreement between the Company
and Robert T. Hass. |
|
* |
| |
|
|
|
|
| 31.1 |
|
Certification of Chief Executive Officer
Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of
1934, as Amended
|
|
** |
| |
| 31.2 |
|
Certification of Chief Financial Officer
Pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of
1934, as Amended
|
|
** |
| |
| 32.1 |
|
Certification
of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
** |
| |
| 32.2 |
|
Certification
of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
** |
____________________
| * |
|
Incorporated by reference to the
Company’s report on
Form 8-K, filed with the Securities and Exchange on March 17,
2010. |
| ** |
|
Filed
herewith. |
28